FW: FI Morning Grain Comments 09/25/18

PDF attached

 

Weather and crop conditions

·         6-10 is wetter and 11-15 wetter.

·         Frequent showers will occur in the Delta this week.

·         The Midwest will also be active which should slow harvesting before a couple more days of net drying occurs outside the Ohio River Valley region.

·         HRW wheat areas will see a mixture of sunshine and rain.

·         Improving weather across Europe and the CIS is bearish for wheat.

·         SA weather looks good.

·         Canada is seeing too much precipitation in form of snow and rain, and temperatures will remain cool.

 

 

SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS

                                WEST CORN BELT                             EAST CORN BELT              

        -Tue               80% cvg of up to 0.40”                    100% cvg of 0.40-1.50”

                                and local amts to 1.0”;                    and local amts to 3.0”

                                Neb. to Wi. wettest                        in Ky. and south Oh.

                                                                                                with up to 0.60” and

                                                                                                local amts to 1.10”

                                                                                                elsewhere

Wed                                                                                      15% cvg of up to 0.20”

                                                                                                and locally more;

                                                                                                wettest east

Wed-Thu             30% cvg of up to 0.20”

                                and locally more;

                                wettest north

Thu                                                                                        Mostly dry with a few

                                                                                                insignificant showers

Fri-Sat                   40% cvg of up to 0.65”                    35% cvg of up to 0.65”

                                and local amts to 1.35”;                 and local amts to 1.35”;

                                Ia. wettest                                          north Il. wettest

Sun-Oct 1            65% cvg of up to 0.75”

                                and local amts to 1.50”;

                                wettest south

Sun-Oct 2                                                                            80% cvg of up to 0.75”   

                                                                                                and local amts to 1.50”

Oct 2-4                  80% cvg of up to 0.75”

                                and local amts to 2.0”

Oct 3-5                                                                                  80% cvg of up to 0.75”

                                                                                                and local amts to 2.0”

Oct 5-8                  Up to 20% daily cvg of                   

                                up to 0.20” and locally                                   

                                more each day

Oct 6-8                                                                                  Up to 20% daily cvg of   

                                                                                                up to 0.20” and locally                   

                                                                                                more each day

 

U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS

                                DELTA                                                   SOUTHEAST

Tdy-Wed             100% cvg of 0.30-1.30”                  

                                with lighter rain in a few

                                areas and local amts over

                                2.50”; wettest south                      

Tue-Thu                                                                               90% cvg of up to 0.75”

                                                                                                and local amts to 1.50”

                                                                                                with some 1.50-3.0”

                                                                                                amts in the west;

                                                                                                driest SE

Thu-Fri                  10-25% daily cvg of

                                up to 0.35” and locally

                                more each day;

                                wettest south

Fri-Sat                                                                                   20-35% daily cvg of

                                                                                                up to 0.40” and locally

                                                                                                more each day

Sat                          60% cvg of up to 0.40”

                                and locally more;

                                wettest south

Sun-Oct 2            5-20% daily cvg of up                      5-20% daily cvg of up

                                to 0.20” and locally                          to 0.20” and locally

                                more each day                                  more each day

Oct 3-5                  75% cvg of up to 0.65”                    70% cvg of up to 0.65”

                                and local amts to 1.40”                   and local amts to 1.40”

Oct 6-8                  Up to 20% daily cvg of                    5-20% daily cvg of up

                                up to 0.25” and locally                    to 0.25” and locally          

                                more each day                                  more each day

Source: World Weather Inc. and FI

 

Bloomberg weekly agenda

TUESDAY, SEPT. 25:

• Intertek and AmSpec release their respective data on Malaysia’s Sept. 1-25 palm oil exports, 11pm ET Monday (11am Kuala Lumpur Tuesday)
  • SGS data for same period, 3am ET Tuesday (3pm Kuala Lumpur Tuesday)
• Unica’s bi-weekly Brazil Center-South sugar output, 9am ET (10am Sao Paulo)
• USDA poultry slaughter for August, 3pm
• S&P Platts Kingsman sugar conference in Miami, 1st day of 2, with speakers from ED&F Man Sugar, RaboResearch, Citi, Mexico National Chamber of the Sugar and Alcohol Industries, Sucroliq, Puma Energy

WEDNESDAY, SEPT. 26:

• EIA U.S. weekly ethanol inventories, output, 10:30am
• FOMC rate decision, 2pm; analysts expect the Fed to raise U.S. interest rates by 25 basis points
• South African crop estimates
• Globoil international vegetable oil conference in Mumbai, Sept. 26-28
  • Commerce Minister Suresh Prabhu and Food Minister Ram Vilas Paswan are expected to attend, along with Oil World Executive Director Thomas Mielke, Godrej Director Dorab Mistry, Sunvin CEO Sandeep Bajoria
• S&P Platts Kingsman sugar conference in Miami, final day, with speakers from Bonsucro, ALESA, Indian Sugar Exim Corp., Central American Sugar Assoc., Avenzza

THURSDAY, SEPT. 27:

• USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
• USDA hogs & pigs inventory for 3Q, 3pm
• USDA agriculture prices received for August, 3pm
• International Grains Council monthly report
• Port of Rouen data on French grain exports
• Buenos Aires Grain Exchange weekly crop report
• Bloomberg weekly survey of analysts’ expectations on grain, sugar prices
• Globoil vegetable oil conference in Mumbai, 2nd day of 3
• EARNINGS: Cargill

FRIDAY, SEPT. 28:

• USDA grain stockpiles for 3Q, including corn, soy, wheat, barley, noon
• USDA wheat production report for September, noon
• Polish crop estimates
• FranceAgriMer weekly updates on French crop conditions
• Globoil vegetable oil conference in Mumbai, final day
• ICE Futures Europe commitments of traders weekly report on coffee, cocoa, sugar positions, ~1:30pm ET (~6:30pm London)
• CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm

Source: Bloomberg and FI

 

Registrations

• No changes

 

 

Macros.

·         US stocks are higher, USD lower, WTI crude higher, and gold higher, at the time this was written. (7:00 am CT)

·         Brent crude is at a 4-year high.

·         US Monthly Home Price (M/M) Jul: 0.2% (R prev 0.3%)

–          –          Monthly Home Price (Y/Y) Jul: 6.4% (prev 6.5%)

–          –          Monthly Home Price Index Jul: 265.0 (prev 264.4)

·         Governor Of Argentina’s Central Bank Has Presented His Resignation

 

Corn.

• Corn is lower following wheat and an improvement in US crop conditions.
• US crude oil was higher. Brent crude traded at a four-year high.
• Baltic Dry Index is up 1.1 percent or 16 points to 1450 points.
• APK-Inform reported Ukraine exported 426,500 tons of grain to China so far this season versus 720,700 tons in 2017-18. Exports of barley are down to 257,500 tons compared with 563,200 tons in July-August 2017.
• China corn prices fell 1.1 percent overnight.
• China’s AgMin ordered states to be supplied with sufficient amounts of pork.  that Beijing must be supplied with sufficient amounts of pork. He asked Hebei leaders to strengthen supervision of transporting live animals.
• Serbia’s corn production was estimated by the states stats office at 6.965 million tons in 2018, up 73.3% over the previous year.
• South Africa’s CEC is due to update corn production on Wednesday and a Reuters trade average is 13.002 million tons, down from 13.207 million estimated by CEC in August.
• USDA US corn export inspections as of September 20, 2018 were 1,263,310 tons, above a range of trade expectations, above 1,035,928 tons previous week and compares to 779,971 tons year ago. Major countries included Japan for 302,778 tons, Egypt for 222,020 tons, and Mexico for 210,862 tons.
• USDA reported US corn harvesting progress at 16 percent, at a Reuters trade guess, up 7 points from the previous week and compares to 10 last year and 11 average.
• USDA reported US corn crop conditions at 69 percent, up 1 from the previous week (trade was looking for unchanged) and compares to 61 last year and 66 average.
• Our weighted crop index for US corn crop conditions ended up at 82.5 percent (82.5/100), up 0.2% from the previous week, above 80.8 a year ago and 82.0 a year ago. Using this index against a 10-year trend yield history against FI crop conditions as of or near October 1, the US yield could end up around 183.0 bushels per acre, up 0.5 bu/ac above the previous week (+8.5/bu above a 174.5 ten-year trend yield), 1.7 bushels above USDA and compares to 176.6 bushels a year ago, the current record.  Using 81.620 million acres for the US corn harvested area, production could end up near 14.936 billion bushels, 110,000 bushels above USDA, assuming ratings remain unchanged from now until October 1.

 

 

Export Developments

·         Under the 24-hour announcement system, US exporters sold 239,630 tons of corn to Mexico for the 2018-19 marketing year.

·         China will sell another 8 million tons of corn for the week ending September 28.

·         China sold nearly 84 million tons of corn out of reserves this season.

 

 

Soybean complex.

·         Soybeans are higher along with soybean meal on appreciating China futures overnight but price gains maybe limited from an improvement in US crop conditions.

·         Argentina crushers near Rosario went on a one-day strike, part of a larger national strike. More crushers may follow in coming days.

·         Matif Rapeseed basis February is up 2.75 euros. ICE canola is higher.

·         Malaysia December palm oil was up 18 and leading SBO 5 higher. Malaysian cash palm oil was up $5.00.

·         Stronger Brent and WTI oil supported palm oil futures.

·         Cargo surveyor SGS reported month to date September 25 Malaysian palm exports at 1,359,870 tons, 572,923 tons above the same period a month ago or up 73%, and 254,315 tons above the same period a year ago or up 23%.

·         AmSpec shows a 61.5% increase and ITS a 64.2% rise in palm exports.

·         Rotterdam oils were unchanged to higher and SA soybean meal when imported into Rotterdam mixed. 

·         China and Japan are back from holiday.

·         China soybean meal was up 2.4% or 76 yuan/ton to 3264, and leading CBOT meal $15.70 higher.

·         China soybeans were 0.6% higher and China soybean oil 44 higher or 0.9%. China palm was up 0.5% or 22 yuan higher.

·         China soybean crush margins on our analysis are running at 141 cents, up from 115 late last week and compare to 85 cents a year ago.

·         Offshore values were suggesting a higher lead for US soybean meal by $6.20 and were lower lead in SBO by 11.

• USDA US soybean export inspections as of September 20, 2018 were 693,890 tons, within a range of trade expectations, below 786,268 tons previous week and compares to 1,036,653 tons year ago. Major countries included Spain for 139,600 tons, Mexico for 81,793 tons, and Egypt for 81,779 tons.

·         USDA reported US soybean harvesting progress at 14 percent, 1 point above a Reuters trade guess, and compares to 9 last year and 8 average.

·         USDA reported US soybean crop conditions at 68 percent, up one point from the previous week (trade was looking for unchanged) and compares to 60 last year and 63 average.

·         Our weighted crop index for US soybean crop conditions is running at 82.4 percent (82.4/100), 0.2 bu/ac above last week, above 80.5 a year ago and 81.4 average. Using this index against a 15-year trend yield history against FI crop conditions as of or near October 1, the US yield could end up near 53.3 bushels per acres (3.6/bu above the 49.7 fifteen-year trend yield), 0.5 bushel above USDA and compares to 49.1 bushels a year ago.  Using 88.628-million-acre soybean harvested area, production could end up near 4.724 billion bushels, if ratings remain unchanged from now until October 1. Our production estimate is 31 bushels above USDA.

 

 

Export Developments

• Egypt’s GASC seeks at least 30,000 tons of soyoil and 10,000 tons of sunflower oil for arrival between Oct. 25 and Nov. 10. Lowest offer for soyoil was $699.21 per ton for 30,000 tons and lowest offer for sunflower oil was $719.00 a ton for 10,000 tons.
• Results awaited: Iran seeks 30,000 tons of sunflower oil on September 24.
• China sold about 2.38 MMT of soybeans out of reserves this season.

 

Wheat

·         US wheat is lower on advancing Northern Hemisphere harvest of spring wheat crops. Note a possible two-sided trade.

·         Paris wheat turned higher after trading lower by more than a euro around 6:45 CT time, but fell again by 8:00 am.

·         Serbia’s 2018 wheat production was pegged by the stats office at 2.942MMT, up 29.3% on the year. The harvested area increased to 648,083 hectares in 2018.

·         Kazakhstan’s harvested 13.950 million tons of grain as of September 24, 38.7% down from last year, from the planned 72.1% of the total areas under crops. Kazakhstan’s grain harvest is forecast at 20 million tons this year.

·         Indonesia’s imports of wheat for flour are expected to reach 8.5 million tons this year, according to a Reuters article citing an industry body said, up from 8 million tons in 2017. Indonesia saw a 9 percent drop in the value of the rupiah against the U.S. dollar and wheat prices are high due to weather problems, making imports more expensive.

• USDA US all-wheat export inspections as of September 20, 2018 were 409,592 tons, within a range of trade expectations, below 410,675 tons previous week and compares to 502,725 tons year ago. Major countries included Mexico for 70,648 tons, China T for 48,772 tons, and Philippines for 32,859 tons.

·         USDA reported US winter wheat planting at 28 percent, up 15 points from the previous week, 3 points above a trade average and compares to 22 last year and 26 average.

 

Export Developments.

• Taiwan seeks 110,000 tons of US wheat on October 2 for Nov-Dec shipment.
• China sold 6,255 tons of imported 2013 wheat at auction of state reserves at an average price of 2,157 yuan ($313.96) per ton, 0.66 percent of total wheat available at the auction.
• Japan seeks 109,150 tons of food wheat on Thursday. Original details as follows.

• Bangladesh seeks 50,000 tons of 12.5 percent wheat on October 9, optional origin.
• Results awaited: UAE seeks 60,000 tons of wheat on September 24 for Oct/Nov shipment.
• Results awaited: Ethiopia seeks 200,000 tons of milling wheat for shipment two months after contract signing. Ethiopia got offers from 7 firms. Lowest offer was for 100,000 tons at $272.05/ton, c&f.

·         Results awaited: Turkey seeks a total of 252,000 tons of red milling wheat for October 2-22 loading. It closes on September 22. The depreciation of the lira sent importers seeking Turkish wheat flour, causing them to restrict exports.  But countries like Iraq that heavily depend on flour from Turkey may have to import from other countries. 

• Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on September 26 for arrival by late February. 
• Jordan seeks 120,000 tons of feed barley, optional origin, on September 26.
• Jordan seeks 120,000 tons of feed wheat, optional origin, on September 27.
• Canadian wheat is the lowest offer in Iraq’s import tender. Lowest was $337/ton. Offers valid until September 27.  Iraq needs wheat for four after Turkey restricted flour shipments.
• Morocco seeks 336,364 tons of US durum wheat on September 28 for arrival by December 31.
• Bahrain seeks 25,000 tons of wheat on October 2 for Nov shipment.

 

Rice/Other

·         China failed to sell any of its 244,979 tons of rice at auction.

·         Mauritius seeks 9,000 tons of rice for delivery between Nov. 15, 2018, and March 31, 2019, set to close is Sept. 27.

·         Iraq seeks 30,000 tons of rice optional origin on October 1, valid until October 7. 

·         Iraq seeks 30,000 tons of rice from India on October 9 for LH October / FH November shipment.